Extractive summaries of and key takeaways from the articles curated from TOP TEN BUSINESS MAGAZINES to promote informed business decision-making | Week 269 |November 4-10, 2022
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Shaping Section : Ideas and forces shaping economies and industries
The world is missing its lofty climate targets. Time for some realism
The Economist | November 3, 2022
To accept that the world’s average temperature might rise by more than 1.5°C, declared the foreign minister of the Marshall Islands in 2015, would be to sign the “death warrant” of small, low-lying countries such as his. To widespread surprise, the grandees who met in Paris that year, at a climate conference like the one starting in Egypt next week, accepted his argument. They enshrined the goal of limiting global warming to about 1.5°C in the Paris agreement, which sought to co-ordinate national efforts to curb emissions of greenhouse gases.
No one remembered to tell the firing squad, however. The same countries that piously signed the Paris agreement have not cut their emissions enough to meet its targets; in fact global emissions are still growing. The world is already about 1.2°C hotter than it was in pre-industrial times. Given the lasting impact of greenhouse gases already emitted, and the impossibility of stopping emissions overnight, there is no way Earth can now avoid a temperature rise of more than 1.5°C. There is still hope that the overshoot may not be too big, and may be only temporary, but even these consoling possibilities are becoming ever less likely.
The consequences of the world’s failure to curb emissions are catastrophic, and not just for coral atolls in the Pacific. Climate-related disasters are proliferating, from Pakistan to Florida. Even less lethal distortions of the weather, such as this summer’s extraordinary heatwave in Europe, do enormous economic damage, impeding transport, wrecking infrastructure and sapping productivity.
The response to all this should be a dose of realism. First, cutting emissions will require much more money. The second hard truth is that fossil fuels will not be abandoned overnight. The third truth is that because 1.5°C will be missed, greater efforts must be made to adapt to climate change. Finally, having admitted that the planet will grow dangerously hot, policymakers need to consider more radical ways to cool it.
Overshooting 1.5°C does not doom the planet. But it is a death sentence for some people, ways of life, ecosystems, even countries. To let the moment pass without some hard thinking about how to set the world on a better trajectory would be to sign yet more death warrants.
2 key takeaways from the article
- Given the lasting impact of greenhouse gases already emitted, and the impossibility of stopping emissions overnight, there is no way Earth can now avoid a temperature rise of more than 1.5°C – a broken promise agreed in Paris agreement in 2015. The consequences of the world’s failure to curb emissions are catastrophic.
- The response to all this should be a dose of realism. First, cutting emissions will require much more money. The second hard truth is that fossil fuels will not be abandoned overnight. The third truth is that because 1.5°C will be missed, greater efforts must be made to adapt to climate change. Finally, having admitted that the planet will grow dangerously hot, policymakers need to consider more radical ways to cool it.
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Topics: Environment, Rising Temperature, Global Economy
Fast Fashion Waste Is Choking Developing Countries With Mountains of Trash
By Natalie Obiko Pearson et al., | Bloomberg Businessweek | November 2, 2022
It’s a disaster decades in the making, as clothing has become cheaper, plentiful, and ever more disposable. Each year the fashion industry produces more than 100 billion apparel items, roughly 14 for every person on Earth and more than double the amount in 2000. Every day, tens of millions of garments are tossed out to make way for new, many into so-called recycling bins.
Few are aware that old clothes are rarely recycled into new ones because the technology and infrastructure don’t exist to do that at scale. Instead, discarded garments enter a global secondhand supply chain that works to prolong their life, if only a little, by repurposing them as cleaning rags, stuffing for mattresses or insulation. But the rise of fast fashion—and shoppers’ preference for quantity over quality—has led to a glut of low-value clothing that threatens to tank the economics of that trade and inordinately burdens developing countries.
The complex task of sorting through that waste stream falls to a largely invisible global industry of brokers and processors. Their business depends on exporting much of the clothing to developing countries for rewear. It’s the most profitable option and, in theory, the most environmentally responsible, because reusing items consumes less resources than recycling them. But there’s no way to trace what happens to a garment once it enters that stream, nor does the technology or infrastructure exist to capture what accumulates at the end of the line.
If the US created the preconditions for fast fashion, it was a Spanish company that perfected the formula. Beginning in the 1980s, Inditex, the corporate parent of Zara, pioneered a retailing model that reduced lead times from months to weeks, allowing it to roll out about 10,000 designs a year, continually deliver new items to its stores and clear out unsold items within 30 days. The effect on shopping habits was astounding: Zara’s customers were dropping by its shops 17 times a year on average, more than four times the usual number. Fast fashion’s pleasure-inducing compulsiveness has accelerated churn. Over the past two decades, the average number of times a garment is worn before it’s discarded has plummeted by 36%. Americans wear their garments the least: fewer than 50 times on average. But the biggest decline came in China, where the average number of wears plummeted from more than 200 to 62 between 2000 and 2016.
There’s a reason waste experts warn that we can’t consume our way to sustainability: Recycling will always use more energy and resources and produce more waste than reusing something or not consuming it in the first place. “Whenever you’re thinking about the circular economy of anything, the best thing to do is to reduce demand.
3 key takeaways from the article
- It’s a disaster decades in the making, as clothing has become cheaper, plentiful, and ever more disposable. Every day, tens of millions of garments are tossed out to make way for new, many into so-called recycling bins.
- Few are aware that old clothes are rarely recycled into new ones because the technology and infrastructure don’t exist to do that at scale. Instead, discarded garments enter a global secondhand supply chain that works to prolong their life, if only a little but inordinately burdening the developing countries.
- Meanwhile, the myth of circularity spreads, shielding companies and consumers from the inconvenient reality that the only way out of the global textile waste crisis is to buy less, buy better, and wear longer. In other words, to end fast fashion.
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Topics: Fashion, Green Economy, Developing Countries
An Indian city of 8 million that turned a garbage-clogged lake into a natural biofilter provides a lesson on how to adapt to climate change
By Bill Spindle | Fortune Magazine | November 8, 2022
Sembakkam Lake, on the outskirts of the Indian city of Chennai, offers a placid view on a recent afternoon, with migratory birds cruising its shores and a small boat with two fishermen bobbing in the center. The calm belies the lake’s pioneering role in a struggle against climate change, and the toll rising sea levels will exact on this rapidly expanding city of 8 million people.
But before all this Sembakkam Lake was just one battleground in Chennai’s fight against rapid population growth and the intensifying impacts from climate change. The two challenges are linked because often the ravages of climate change inflict the greatest hardship on the poorest and least established residents who make up the biggest source of economic growth.
Climate-related disasters threaten economic dynamism in the developing world just as its cities are grappling with an influx of new residents, thus defeating the reason so many flocked to those cities in the first place—to escape grinding poverty. Will fast-growing, climate-battered cities of the developing world remain quagmires, multiplying the destructive capacity of climate change? Or can they be transformed into bulwarks of sustainable growth? Sembakkam Lake projects offers one hope.
Dec. 3, 2015 deadly flood added urgency to the city’s plans to address climate change. Chennai authorities had done enough thinking about climate change to understand that disasters like the flood—as well as heat waves, droughts and rising sea levels—would become increasingly common in their city as the planet warms. The flood galvanized an unprecedented effort by city officials to work with environmental and social advocacy groups, businesses and local academic institutions to forge a comprehensive response to the climate challenges ahead, particularly when it came to flooding and drought.
The trick was to “turn the crisis into an opportunity,” said Wilfred Davidar, a former official with the state of Tamil Nadu, who was involved in the city’s response to the flood and the overhaul of its approach to planning afterwards.
The city and Tamil Nadu state government, joined by a range of outside groups, embarked on an unprecedented, coordinated response. Some of the city’s first steps to handle the flooding underscored the drawbacks of established methods for dealing with natural disasters when applied to the chronic challenge of climate change. Authorities leaned into a plan to relocate large but informal communities that had established themselves along the banks of rivers, which they did.
But now pressure is growing to swing the pendulum away from displacing communities along the city’s waterways to development that seeks to make them more resilient to the consequences of climate change. At Sembakkam Lake, for example, The Nature Conservancy is building a facility that uses an aerated lagoon and reed beds to filter waste and sewage before it enters the lake from surrounding communities. It has teamed up with a local branch of the prestigious Indian Institute of Technology and IBM to monitor water quality directly and using satellite photos.
Recreational fishermen have returned to Sembakkam Lake amid its restoration. The rehab project is reviving some native species and providing a place for rain to gather, recharging the area’s underground aquifers.
3 key takeaways from the article
- Climate-related disasters threaten economic dynamism in the developing world. Will fast-growing, climate-battered cities of the developing world remain quagmires, multiplying the destructive capacity of climate change? Or can they be transformed into bulwarks of sustainable growth? Sembakkam Lake projects in Indian city Chennai offers one hope.
- Chennai’s fight against rapid population growth and the intensifying impacts from climate change – the two challenges are linked because often the ravages of climate change inflict the greatest hardship on the poorest and least established residents who make up the biggest source of economic growth.
- The project galvanized an unprecedented effort by city officials to work with environmental and social advocacy groups, businesses and local academic institutions to forge a comprehensive response to the climate challenges ahead, particularly when it came to flooding and drought.
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Topics: Environment, Climate Change, India
Strategy & Business Model Section
The Ideas That Inspire Us
Harvard Business Review | From the Magazine (November–December 2022) issue
Harvard Business Review published its first issue 100 years ago with a mission to help leaders put the world’s best management thinking into practice. To mark its centennial, the magazine asked eight current and former CEOs from some of the world’s top companies to describe the ideas that have propelled their own careers and organizations. That’s what comes from these CEOs.
- Stéphane Bancel, CEO / Moderna. Most people think about the future of business from the present onward. However, this approach limits our creativity and inhibits our ability to achieve what was previously unimaginable. Consider a better alternative. By thinking five to 10 years out and then “playing the movie backward,” you free yourself from the constraints of what is possible now.
- Anish Shah, CEO / Mahindra. We live in an unequal world that divides us from one another. Purpose-led businesses have the potential to create a more equal world. Only when we enable others to rise will we rise.
- Roz Brewer, CEO / Walgreens Boots Alliance. Listening is fundamental to good leadership and management; however, to be effective, it must be practiced with great intention. Active listening helps to identify problems to solve, possibilities for innovation, necessary process or policy changes, new product ideas, ways to improve customer service, and more.
- Nicolas Hieronimus, CEO / L’Oréal. One of the biggest challenges facing any multinational company is how to stay locally relevant while still driving economies of scale and maximizing global reach. At L’Oréal, they have tackled this dilemma with an approach they call universalization: a centrally led strategy brought to life through local execution. Concretely, this means that their teams in individual markets have a high degree of autonomy but operate under a clear, globally aligned frame.
- Joey Wat, CEO / Yum China. The companies that survive and prosper in dynamic, competitive markets are not necessarily the strongest or the smartest; they’re the ones that can respond quickly and adapt effectively to changing circumstances. That requires empathy for those we’re serving, resilience, and creativity.
- Mo Ibrahim, Former CEO / Celtel. Borrowing from African culture, one key principle he learned from his ancestors is the importance of caring for one’s neighbors. In his business ventures, that commitment has translated to what he calls inclusive capitalism. (Others might use the term stakeholder capitalism.) As an entrepreneur and a CEO, his aim is to ensure that everyone who helps him achieve success—employees, investors, customers, members of the community—shares in the rewards.
- Ignacio Galán, Executive Chairman / Iberdrola. Commit to becoming the leading provider of clean energy in Europe and other markets but also to regularly release information on our progress toward that goal, including publishing a detailed annual environmental performance report.
- Indra Nooyi, Former CEO / PepsiCo. The company was driven by the goal to deliver great financial returns with three additional clear imperatives: to nourish humanity and the communities in which we live, to replenish our environment, and to cherish our people.
3 key takeaways from the article
- Harvard Business Review published its first issue 100 years ago with a mission to help leaders put the world’s best management thinking into practice.
- To mark its centennial, the magazine asked eight current and former CEOs from some of the world’s top companies to describe the ideas that have propelled their own careers and organizations.
- Key themes emerged: Planning from the Future Back, Purpose-Driven Strategy, Listening as a Leader, Global Vision with Local Execution, Continuous Innovation, Inclusive Capitalism, Transparent Sustainability Reporting, and Performance with Purpose.
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Topics: Strategy, Performance, Social Organizations
Raising the resilience of your organization
By Dana Maor et al., | McKinsey & Company | October 12, 2022
Resilient organizations don’t just bounce back from misfortune or change; they bounce forward. They absorb the shocks and turn them into opportunities to capture sustainable, inclusive growth. When challenges emerge, leaders and teams in resilient organizations quickly assess the situation, reorient themselves, double down on what’s working, and walk away from what’s not.
Cultivating such organizational resilience is difficult, however—especially these days, when business leaders, frontline workers, and business units are being buffeted by multiple disruptions at once. And the reality is, there is no shelf life on change and no expiration date on organizational resilience. There will always be more uncertainty, more change, and a constant push for teams to realize outcomes more quickly. Companies that cultivate organizational resilience—driven not only by the crisis but also by opportunity—can gain an important, lasting advantage over competitors. Where should organizations start? McKinsey’s body of research and work over decades with organizations seeking to be more resilient points to the need to bolster capabilities at four levels.
- Organizations can build an agile organization; a shift toward faster, federated, data-informed decision-making and “good enough” outcomes can make it easier for leaders and teams to test, learn, and adjust in the wake of complex business challenges.
- They can build self-sufficient teams that, when held accountable and given ownership of outcomes, feel empowered to carry out strategic plans and stay close to customers, and which, through premortems, postmortems, and other feedback loops and mechanisms, have the information they need to continually change course or innovate.
- They can find and promote adaptable leaders who don’t just react when faced with, say, a natural disaster, a competitor’s moves, or a change in team dynamics. They take the time to coach team members through the change. They catalyze new behaviors, and they develop capabilities that can help set the conditions for both a short-term response and long-term resiliency.
- And they can invest in talent and culture—now and for the future. Companies that focus on building resilient operations, teams, and leaders may gain a two-way talent advantage: such adaptable environments are more likely to attract top talent who will have a greater chance of success and, in turn, be more likely to perpetuate a cycle of resilience.
3 key takeaways from the article
- Resilient organizations don’t just bounce back from misfortune or change; they bounce forward. They absorb the shocks and turn them into opportunities to capture sustainable, inclusive growth.
- Cultivating such organizational resilience is difficult. But the reality is, there is no shelf life on change and no expiration date on organizational resilience. There will always be more uncertainty, more change, and a constant push for teams to realize outcomes more quickly.
- Where should organizations start? McKinsey’s body of research and work over decades with organizations seeking to be more resilient points to the need to bolster capabilities at four levels: they can build an agile organization, they can build self-sufficient teams, they can find and promote adaptable leaders, and they can invest in talent and culture.
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Topics: Strategy, Resilience, Teams, Talen Management
Leading & Managing Section
Delegating Part III: Eight Levels Of Delegating
By Eli Amdur | Forbes Magazines | November 9, 2022
Delegation is much more than just assigning someone something to do. But different employees can accept and manage different levels of task expertise, decision making, and autonomy in carrying out a job. This is one of the most important decisions you as a manager can ever make: how much freedom and autonomy to grant.
Clearly, good judgment in what to delegate to whom is mission-critical. It is also critical to the individual development of the person to whom you’re delegating, and it’s critical to the development of your team and your entire organization. Seven levels od delegation continuum, from lowest to highest are:
Level One: Granting no delegated authority whatsoever. “Wait to be told” or “Do exactly what I say” or “Follow these instruction.”
Level Two: Asking for initial input, but no more. “Look into this and tell me what you come up with. I’ll decide.”
Level Three: Asking for analysis and recommendation, but you’ll check the thinking before deciding. “Give me your recommendation and any options with the pros and cons of each. I’ll get back to you with a decision and let you know if you can go ahead.”
Level Four: Trusting judgment, asking for a suggested decision, but waiting there. “Analyze the situation, decide and let me know what your decision is, but wait for my go ahead.”
Level Five: Allowing more influence on the employee’s part. “Decide and let me know your decision, then go ahead unless I say not to.”
Level Six: Beginning to grant real authority. “Decide and take action, but let me know what you did. Keep me posted.”
Level Seven: Delegation of operational responsibility. The most freedom you can delegate while still retaining regular involvement. “Decide and take action. You don’t have to check back with me every day, but we’ll set up milestones.”
Level Eight: Delegation of strategic responsibility. The highest level of freedom you delegate. “Decide what needs to be done to do the job or manage the project, and where action needs to be taken. Then do it. It’s your area of responsibility now.”
3 key takeaways from the article
- Delegation is much more than just assigning someone something to do.
- This is one of the most important decisions you as a manager can ever make: how much freedom and autonomy to grant.
- Clearly, good judgment in what to delegate to whom is mission-critical. It is also critical to the individual development of the person to whom you’re delegating, and it’s critical to the development of your team and your entire organization. Seven levels of Delegation Continuum are: granting no delegated authority whatsoever; asking for initial input, but no more; asking for analysis and recommendation, trusting judgment; asking for a suggested decision, but waiting there; allowing more influence on the employee’s part; beginning to grant real authority, delegation of operational responsibility; and delegation of strategic responsibility.
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Topics: Leadership, Delegation, Teams
Entrepreneurship Section
You Can Now Add A.I.-Powered Art to Your Business Model
By Ben Sherry | Inc Magazine | November 9, 2022
If you’ve been dreaming up business applications for AI-generated art, you can now make those dreams a reality. Artificial intelligence research and deployment company OpenAI has released its image generation model Dall-E as an API, meaning any business can now create its own proprietary AI-generated art.
Dall-E’s algorithm analyzes an enormous number of labeled images to identify objects, art styles, and how various objects interact with each other. It then uses this information to create customized images based on natural-language text prompts. Businesses can therefore generate original logo designs for new products or create aesthetically cohesive wall art in seconds.
The three key pieces of information to know about the Dall-E API are:
- OpenAI will charge businesses a small fee for every image generated through their API
- There are limits to what the app will create. Following Dall-E’s initial rollout earlier this year, OpenAI has instituted a number of restrictions and guidelines to govern what can and can’t be generated by the algorithm. According to the content policy, users are prohibited from generating hate symbols e.g.,
- You’ll own all the images you generate using Dall-E and you are free to reprint, sell, and merchandise generative art, according to OpenAI’s content policy. However, OpenAI does require that you properly label the art to specify that it has been made by an algorithm.
Small and midsize businesses can have all-in-one fashion design interface that incorporates Dall-E to assist with ideation of new products. The businesses can choose a product type, such as a T-shirt, coat, or dress, and then use natural-language prompts to customize their creations to their own specifications. Developers who want to integrate Dall-E into their products will need to register their applications with OpenAI before launching to end users.
3 key takeaways from the article
- If you’ve been dreaming up business applications for AI-generated art, you can now make those dreams a reality. Artificial intelligence research and deployment company OpenAI has released its image generation model Dall-E as an API, meaning any business can now create its own proprietary AI-generated art.
- Dall-E’s algorithm analyzes an enormous number of labeled images to identify objects, art styles, and how various objects interact with each other. It then uses this information to create customized images based on natural-language text prompts.
- Three key pieces of information to know about the Dall-E API: OpenAI will charge businesses a small fee for every image generated through their API, you’ll own all the images you generate using Dall-E and there are limits to what the app will create.
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Topics: Entrepreneurship, Creativity, Technology, Artificial Intelligence
Not Every Leader Has to Be Steve Jobs, And 9 Other Pieces of Advice from Redfin CEO Glenn Kelman
By Jason Nazar | Entrepreneur Magazine | November 4, 2022
Seattle-based Redfin set out 15 years ago to create a combination tech company and a real estate brokerage to make the industry work better for customers and agents. The technology-powered real-estate company generated $1.9 billion in revenue in 2021 — a 10x increase from 2015. The author sat with his CEO Glenn Kelman who shared the following ten lessons from his bumpy entrepreneurial ride.
- Business can be a force for good. Business is only as good or bad as the people who drive it. An enterprise can give people a common sense of purpose, a sense of belonging and a way to express their ideas and abilities. Most important, we need the industry and commerce of humanity to solve the world’s problems.
- Find a support group that knows your value and continually pushes you to realize it. Kelman’s friends and family never gave up on him. He was always encouraged and told that if this doesn’t work, he can try something else. It’s never too late to find something you really believe in.
- A leader’s path isn’t always in a straight line. Kelman says he’s thankful for his post-college years of searching for his dream job, including writing a novel and considering a medical career, as these experiences helped develop him into the person he is today.
- Not everyone has to be Steve Jobs. Just be yourself. “Only a genius can be a genius. But any leader can be respectful and kind.”
- Focus on what customers need and want versus trying to please Wall Street. Investors have fickle demands. Trying to please Wall Street can tie a leader into knots. The best bet is to tell investors who you are, how you are going to make your customers happy and how that will lead to profitability.
- A CEO should love their company more than anyone else.
- Don’t let your level of self-esteem ride up and down with the ebb and flow of your finances. Your job is to get out of bed and bring the future to life, whatever the current standings.
- Get enough sleep.
- We all want to be the smartest person in the room, but the best and most valuable trait for a leader is to be humble. “That’s a skill that’s accessible to all of us. If you let other people flower, you will build a much larger and more successful organization.
- A CEO should be the “great exhilarator.” You can’t be volatile as a CEO, but you can be — and have to be — emotional when the emotions are big and good. You have to make the people you lead feel something big and good.”
2 key takeaways from the article
- Seattle-based Redfin set out 15 years ago to create a combination tech company and a real estate brokerage to make the industry work better for customers and agents. The technology-powered real-estate company generated $1.9 billion in revenue in 2021 — a 10x increase from 2015.
- The CEO Glenn Kelman of Redin shared the following ten lessons from his bumpy entrepreneurial ride: business can be a force for good; find a support group that knows your value and continually pushes you to realize it; a leader’s path isn’t always in a straight line; not everyone has to be Steve Jobs, just be yourself; focus on what customers need and want versus trying to please Wall Street; a CEO should love their company more than anyone else; don’t let your level of self-esteem ride up and down with the ebb and flow of your finances; get enough sleep; be humble; and a CEO should be the “great exhilarator.”
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Topics: Entrepreneurship, Startups